Tax time is nearly upon us. Past guest, contributing writing, and tax expert Johnny Horta joins us to explain the vagaries of the US tax system.
Until we get a flat tax (which will never happen) taxes will continue to be a monumental pain in the ass. So we brought on a guest to give us some expert advice.
FreeTaxUSA is easy to use but it doesn’t help you understand tax law. A tax pro can help you interpret the laws to get the most money back you can. According to H&R Block, Americans left $1 billion dollars on the table last year. Turbo Tax doesn’t seem so cheap now.
Putting money into a tax shelter account can drop you a bracket and is a good practice but it won’t save you tons of money. The IRS will take that into account and use your adjusted gross income to determine your tax bracket.
Now you have your AGI and you can deduct standard or itemized deductions and personal exemptions. Are you married and filing jointly or separately, do you have dependents? Now we get into itemized deductions, medical expenses, mortgage interest, charitable donations, etc. Compare that to the standard deductions and see which is higher.
The name of the game is itemized deductions.Tweet This
Single people with no dependents, claim yourself, so put a 1 on the W4 form. I always wonder this and no one ever knows the answer! If you’re getting too big a refund, adjust the W4. You shouldn’t be giving the US government an interest free loan every year. I know that big ass check is fun though!
Now we get to credits which you can get for a variety of things, child care costs, education costs, earned income. These credits are then applied to your tax bill.
This was a lot of technical information so we’re going to give you some time to digest it for now but we will doing a series of tax based shows in the coming weeks.
We are also hosting a webinar where our hosts and Johnny will answer your tax questions live. Don’t e-mail Andrew tax questions, come to the webinar and ask there. It will be Monday February 2 at 8:30 Eastern. Go here to sign up for information about how to join.
Keegan Ales Mother’s Milk: A dark, creamy milk stout.
Left Hand Brewing Milk Stout: A creamy, sweet stout.
Horta Tax & Financial Services: Contact Johnny for expert advice.
W4 Calculator: Plug in your numbers to see what your witholdings will be.